Sell Pharma - Buy Dental - RFK Effect
- Details
- Published: Wednesday, 27 November 2024 09:37
- Written by Peter Ingle
- Hits: 816
It has not been a great few weeks for supporters of water fluoridation. First there was widespread reporting on studies suggesting that its benefits had been previously overstated. Then shortly before the USA election, Senator Robert F Kennedy Jr. said that: “Fluoride is an industrial waste associated with arthritis, bone fractures, bone cancer, IQ loss, neurodevelopmental disorders, and thyroid disease.”
At that point Kennedy, a former independent presidential candidate, appeared to be suggesting that a Trump administration might go as far as advising all USA water systems to remove fluoride from public water. This was at the time when it was widely argued that the election was on a knife edge. Analysts were not agreed that Donald Trump would win the Electoral College, let alone the popular vote, or that the House of Representatives and Congress would have Republican majorities.
A few days after the election the President elect announced that RFK would be his Department of Health and Human Services secretary. In a post on X, formerly twitter, he said: “Mr. Kennedy will restore these Agencies to the traditions of Gold Standard Scientific Research, and beacons of Transparency, to end the Chronic Disease epidemic, and to Make America Great and Healthy Again!”
RFK is also known for his anti-vaccine stance and following the announcement of his appointment, shares of prominent vaccine makers fell sharply. But there were some beneficiaries, too.
On the basis that removal of fluoride would increase rates of caries and the volume of dental treatment needed, the value of Henry Schein shares rapidly rose by 5% representing its best performance since July.
The share price of Dentsply Sirona also rose, as did those of Envista, the group that includes brands such as Kerr, Nobel Biocare and Gendex.
These changes reflect investors preparing for public health changes under a second Trump administration. According to business research advisers Gordon Haskett, stocks that make dental hygiene products are seen as potential beneficiaries of the Trump and RFK policies.
Don Bilson, Gordon Haskett’s head of event-driven research, explained the effects of fluoride removal to his clients, and then concluded: “This will, in turn, lead to an acceleration of tooth decay and more dental visits.”
Henry Schein and similar stocks offer a bright spot within a sector where most companies have struggled since the election. Typical falls of 3.5% in the first fortnight of November left the sector looking set for its first three-month losing streak since last year. In comparison, the broad S&P 500 has climbed more than 3% over the same period.
Large pharmaceutical names and businesses involved in processed foods, took a hit as traders prepared for the Kennedy effect.
“It caused widespread selling across the healthcare landscape,” Bilson said of the decision to select Kennedy. “Drugmakers, contract research organizations, and health insurers all felt the quake. Rather than stop there, the damage spilled into packaged foods. And advertising.”
There may however, be an element of over reaction in the recent market changes. Bilson added that regulatory changes would likely take years to come into effect. He also noted that drinking water should fall more under the Environmental Protection Agency than Health and Human Services.
You need to be logged in to leave comments.
Report